Wrapup 1: Cathay CEO resigns amid Hong Kong protest blowback as more rallies planned

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16/08/2019 12:06

* Cathay Pacific had been forced to suspend protesting staff
    * More protests planned for weekend
    * Hong Kong tycoon Li urges love, tolerance amid protests
    * Crisis poses major challenge for Chinese leader Xi

    By Donny Kwok and Twinnie Siu
    HONG KONG, Aug 16 (Reuters) - The boss of Hong Kong carrier
Cathay Pacific Airways quit on Friday, the highest-profile
corporate casualty of unrest roiling the former British colony,
after Beijing targeted the airline over staff involvement in
mass protests.
    The corporate upheaval comes ahead of a weekend where
further protests are planned, including what could be a large
gathering on Sunday that could test whether a movement that has
enjoyed broad support can retain it, even as violence escalates.
    Demonstrators say they are fighting the erosion of the "one
country, two systems" arrangement that enshrined some autonomy
for Hong Kong since China took it back from Britain in 1997.
    Police have granted permission for a rally called "Stand
with Hong Kong, Power to the People" planned in the central
business district on Friday night. But they have banned other
protests planned for the weekend. 
    A rally set for Sunday by the Civil Human Rights Front,
which organised million-strong marches in June, has only been
allowed permission for an assembly in Victoria Park on Hong Kong
island, though not a march, due to safety concerns.
    The group is appealing against the police decision.
    Another march planned in Kowloon's Hung Hom district on
Saturday has also been banned.
    Ten weeks of confrontations between police and protesters
have plunged Hong Kong into turmoil, and present the biggest
popular challenge to Chinese President Xi Jinping since he came
to power in 2012.
    Police tactics against protesters have been hardening.
    "Any person who endangers the safe operation of the
aerodrome or the safety of persons in the aerodrome by act of
violence is liable to life imprisonment," Acting Chief
Superintendent Man-pun Yeung told reporters on Friday.
    Nearly 750 people have been arrested since the protests
began in June, and tear gas has frequently been used by police
in attempts to disperse protests across the city.    
    China has likened the increasingly violent protests to
terrorism and warned it could use force to quell them, as U.S.
President Donald Trump urged Xi meet protesters to defuse the
tension.  urn:newsml:reuters.com:*:nL4N25B02Q
    Chinese paramilitary troops have been training this week in
Shenzhen, which borders Hong Kong, in a clear warning to the
protesters. Hong Kong police reiterated on Friday that they are
capable of maintaining law and order on their own.
    
    CITY SYMBOL
    Cathay Pacific, an emblem of the city, was blindsided last
week when China's aviation regulator demanded it suspend staff
supporting a movement that has mushroomed from opposition to a
legal change in Hong Kong into wider calls for democracy.
    The abrupt departure of Chief Executive Rupert Hogg, a move
the company said was "to take responsibility ... in view of
recent events," shows just how much pressure Beijing is piling
on corporate giants and the city as it seeks to snuff out the
protests.  urn:newsml:reuters.com:*:nL4N25C23J
    Cathay  0293.HK  became embroiled in the confrontation after
one of its pilots was arrested at a demonstration in July.
    China's aviation regulator demanded any staff involved or
supportive of the protests be removed from duty on flights to or
over mainland airspace. Cathay shares hit a 10-year low.
    The company, whose chairman had initially said, before the
demand, that it "wouldn't dream" of telling staff what to think,
later acceded to the request, firing two pilots and saying 
"overly radical" staff would be suspended from mainland duties.
    Hogg said these had been "challenging weeks" for the airline
and it was right for him, and the company's chief customer
officer who also abruptly quit, to take responsibility.
    "Cathay Pacific is fully committed to Hong Kong under the
principle of 'one country, two systems,'" the airline said in a
statement.
    
    UGLY SCENES
    The protests began as opposition to a now-suspended bill
that would have allowed suspects to be extradited to mainland
China. They have swelled since, and demands have broadened.
    Hong Kong returned from British to Chinese rule in 1997
under a "one country, two systems" formula that promised
wide-ranging freedoms denied to citizens in mainland China. Many
in the city believe Beijing has been eroding those freedoms.
    The tenor of clashes intensified this week. Thousands of
flights were cancelled amid ugly scenes at the city's airport,
when protesters set upon men they suspected were Chinese agents.
    On Friday, the city's richest man, Li Ka-Shing, urged people
to "love China, love Hong Kong and love yourself" in newspaper
advertisements that marked his first comments on the crisis.
    But Li, 91, and a fixture of Hong Kong business who founded
CK Asset Holdings Ltd  1113.HK  and chaired CK Hutchison
Holdings  0001.HK , stopped short of explicitly backing the Hong
Kong government, as many business leaders have done.
    He made no reference to supporting the government or its
embattled leader, Carrie Lam, in the advertisements, which
encouraged freedom, tolerance and the rule of law. Many
businesses, including other major property developers, have
publicly backed Lam's administration and the city's police.
    "I think the government heard the messages from the
protesters loud and clear and is diligently racking their brains
now for solutions," Li said.
    He warned, "The best cause can lead to the worst results."

 (Reporting by Felix Tam, Donny Kwok, Twinnie Siu and Farah
Master in Hong Kong and Jamie Freed in Singapore; Writing by Tom
Westbrook;
Editing by Tony Munroe and Clarence Fernandez)
 ((farah.master@thomsonreuters.com; +852 28431631 ;))